PRUDENT YET GROWTH-FOCUSSED

The Union Budget 2024-25 aims to maintain fiscal health while stimulating economic growth, thus laying a strong groundwork for India's future

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One of the frequently-used expressions to describe the Union Budget 2024 is “reasonable.” It was indeed a reasonable budget, focusing more on the poor, the middle class and the rural population. In a broader context, the government’s focus has been on protecting the interests of the people who form a large part of the middle and bottom of society’s pyramid. Let us look at the salient features of the Union Budget 2024 to understand this clearly.

For the sake of simplicity, we will start with personal and corporate taxes. Then, we will move on to broad sectoral announcements. We will follow a simple structure, focusing on key announcements in each category or sector. So, read on:

PERSONAL TAX

There have been certain amendments in the New Tax regime (NTR). Firstly, a key development is the increase in standard deduction from ₹50,000 to ₹75,000. Now, let us understand the key changes in the tax structure based on income:

• Income up to ₹3 lakh: no tax

• Income above ₹3 lakh to ₹7 lakh: 5% tax

• Income above 7 lakh to 10 lakh: 10% tax

• Income above ₹10 lakh to ₹12 lakh: 15% tax

• Income above ₹12 lakh to ₹15 lakh: 20% tax

• Income above ₹15 lakh: 30% tax

In the New Tax Regime, the following key developments have transpired:

• Deductions available to an employer for contribution to New Pension Scheme (NPS) have been increased to 14% from 10% of an employee’s salary

• Deductions available for family pension to pensioners have been increased to ₹25,000 from ₹15,000

• There is a proposal to classify all listed financial assets as long-term if held for more than one year and all unlisted financial assets and non-financial assets will be considered long term if held for more than two years